Special Topic Trends and Drivers of the Aesthetic Market during a Turbulent Economy Stelios C. Wilson, B.A. Marc A. Soares, M.D. Patrick L. Reavey, M.D., M.S. Pierre B. Saadeh, M.D. New York, N.Y.

Background: Aesthetic procedures are significant sources of revenue for plastic surgeons. With the popularity of nonsurgical aesthetic procedures, many plastic surgeons question how to best tailor their aesthetic practice. Methods: Revenue generated from surgical and minimally invasive aesthetic procedures performed in the United States between 2000 and 2011 was calculated from the American Society of Plastic Surgeons’ annual reports. Regression analysis was performed against six commonly cited economic indicators. Results: In 2011, revenue from minimally invasive procedures increased from $3.0 billion to $5.7 billion (90 percent growth), whereas revenue from surgical procedures decreased from $6.6 billion to $6.0 billion (10 percent decline). Between 2000 and 2011, minimally invasive procedure market share grew from 30 percent to nearly 50 percent. Linear regression analysis revealed significant correlations between surgical procedure revenue and indicators of macroeconomic climate: Dow Jones Industrial Average (R = 0.72; p < 0.01), Standard & Poor’s 500 Index (R = 0.64, p < 0.05), and unemployment rate (R = −0.81; p < 0.001). Minimally invasive procedure revenue was significantly correlated with indicators related to microeconomic decision trends: disposable income per capita (R = 0.93; p < 0.001), real gross domestic product per capita (R = 0.88; p < 0.001), and home price index (R = 0.63; p < 0.05). No economic indicator in this study was found to be significantly correlated with both surgical and minimally invasive revenue. Conclusion: Despite economic turbulence, minimally invasive procedures are the most rapidly growing source of revenue and are poised to be the dominant source of revenue in the aesthetic market.  (Plast. Reconstr. Surg. 133: 783e, 2014.)

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esthetic procedures are significant revenue streams for plastic surgeons. In general, these types of procedures are elective and largely not covered by insurance, requiring consumers to pay providers directly. The lack of insurance coverage along with the provider-driven competition for surgical procedures makes the aesthetic market unique in the way it functions in the context of the economy.1 Unlike most fields of medicine, the aesthetic market has been noted to follow the same standard economic laws and principles as other nonmedical service industries.2,3 There is a relatively young but growing body of literature dedicated to understanding how the U.S. aesthetic market responds to the economy. From the Institute of Reconstructive Plastic Surgery, New York University Langone Medical Center. Received for publication August 1, 2013; accepted January 29, 2014. Copyright © 2014 by the American Society of Plastic Surgeons DOI: 10.1097/PRS.0000000000000248

Previous analyses have correlated number of aesthetic procedures performed with various economic indicators using linear regression analysis.4–6 Others have used price analysis in a similar manner.2,7 Because price affects demand, and vice versa, neither price nor procedure volume alone is an optimal variable to use when attempting to make associations with the economy.8 Instead, total revenue, which represents the free market equilibrium set by the interplay between price and demand, may be a more appropriate variable to study within the context of the economy.8 In the past, the vast majority of aesthetic revenue was generated from surgical procedures.9 More recently, minimally invasive procedures such as botulinum toxin, soft-tissue fillers, chemical peels, and laser treatments have continued to garner increased attention from the public and Disclosure: The authors have no financial interest to declare in relation to the content of this article.

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Plastic and Reconstructive Surgery • June 2014 national media alike.10,11 In fact, a recent online news search of this subject yielded more than 450 unique media stories (print and video) published in the past month alone. In light of the burgeoning popularity of minimally invasive procedures, many plastic surgeons question how to best tailor their aesthetic practices, particularly in the context of recent economic turbulence.12 The purpose of this study was to explore how aesthetic market revenue streams have changed over the past 12 years. In particular, we were interested in gaining a better understanding of how both surgical revenue and minimally invasive procedure revenue fluctuated in relation to the economy during this period. In general, minimally invasive procedures cost less than surgical procedures. In contrast to surgical procedures, many minimally invasive procedures such as botulinum toxin require repeated treatment, which can be easily delayed or discontinued during difficult economic times. Thus, we hypothesized that revenue from minimally invasive procedures would be associated with microeconomic indicators, or indicators correlated with an individual’s personal consumption, disposable income, and personal wealth. In contrast, we hypothesized that revenue from surgical procedures would be associated with macroeconomic indicators, or indicators correlated with the overall strength of the economy. The principles set forth in this study may help explain how the aesthetic market has changed in recent years and also offer insight into the future direction of this dynamic market.

METHODS For this analysis, information regarding cosmetic surgical and cosmetic minimally invasive procedures performed between 2000 and 2011 was obtained from the American Society of Plastic Surgeons’ annual reports on plastic surgery statistics.9 The data include not only plastic surgeons but also other board-certified physicians and surgeons who routinely perform both surgical and minimally invasive aesthetic procedures.9 Economic indicators including the Dow Jones Industrial Average, the Standard and Poor’s 500 Index, civilian unemployment rate, real gross domestic product per capita, Case-Shiller Home Price Index, disposable income per capita, and consumer price index calendar year–averaged data were obtained from the Federal Reserve Economic Data.13 For the purposes of this analysis, we studied three indicators of the macroeconomic climate: the U.S. unemployment rate and two stock market

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indices: the Dow Jones Industrial Average and the Standard and Poor’s 500 Index. The unemployment rate, or percentage of the labor force without a job but actively seeking employment, is historically high during times of recession and low during periods of economic growth, making it a well-cited indicator of current economic status.8 Similarly, there are three stock market indices commonly cited as indicators of U.S. economic health: the Dow Jones Industrial Average, the Standard and Poor’s 500 Index, and NASDAQ. The Dow Jones Industrial Average reflects the stock price of the 30 largest and most influential corporations in the United States. The Standard and Poor’s 500 Index, described as a better gauge of stock market strength than the Dow Jones Industrial Average, is composed of 500 companies with greater diversity in terms of sector and company size. Of note, the NASDAQ, composed primarily of technology companies, was excluded from our analysis because it includes both U.S.-owned and non–U.S.-owned companies, and thus is a less reliable indicator of the U.S. economy. We also explored indicators more closely related to microeconomic decision trends, including the Case-Shiller Home Price Index and real disposable income per capita. The Case-Shiller Home Price Index, a 20-city composite index that reflects inflation-adjusted home prices, was used because personal consumption has been found to be more sensitive to housing wealth than stock market wealth.14 We also analyzed real disposable income per capita, or the average amount of posttax dollars per individual, because this variable directly relates to personal consumption.15 All nominal data were adjusted for inflation using the consumer price index and reported in 2012 U.S. dollars. Total revenue earned in the United States for 19 of the most common aesthetic surgical procedures and nine of the most common minimally invasive aesthetic procedures was then calculated by multiplying each by their respective inflation-adjusted average surgeon/ physician fee. Linear regression analysis was performed using statistical software StatPlus (AnalystSoft, Inc., Alexandria, Va.).

RESULTS The Aesthetic Market, as a Whole, Has Grown Over the past 12 years, the U.S. economy has experienced a period of strong economic growth punctuated by two periods of recession (March of 2001 to November of 2001, and December of 2007 to June of 2009) and, most recently, economic

Volume 133, Number 6 • Aesthetic Market and the Economy stagnation.13 Despite this economic turbulence, we found that the market for aesthetic procedures has continued to expand. In 2011, the total revenue for all cosmetic procedures was $11.7 billion, a 20 percent increase from 2000. This growth was not uniform. In fact, the revenue from surgical procedures experienced a net decline of 10 percent during this period ($6.6 billion in 2000 to $6.0 billion in 2011). In contrast, the revenue generated from minimally invasive procedures nearly doubled over 12 years and increased its market share from 30 percent to nearly 50 percent ($3.0 billion in 2000 to $5.7 billion in 2011) (Fig. 1).

Similarly, but less dramatically, inflation-adjusted revenue from soft-tissue fillers in 2011 was more than $1.1 billion compared with $600 million in 2000 (95 percent growth). Together, revenue generated from botulinum toxin and soft-tissue fillers grew from being 9.5 percent of the entire aesthetic market (both surgical and minimally invasive) in 2000 to more than 28 percent in 2011 (Fig. 2). In comparison, the revenue from all minimally invasive procedures other than botulinum toxin and soft-tissue fillers experienced a net growth of just 6 percent in the same 12-year period.

Botulinum Toxin and Soft-Tissue Fillers Have Primarily Driven Minimally Invasive Procedure Revenue Growth Although the growth of the entire market has been driven primarily through the increased consumption of minimally invasive procedures, growth within the minimally invasive market was also found not to be uniform. Most notable was the increase in revenue generated from botulinum toxin and soft-tissue fillers. Specifically, ­inflation-adjusted revenue from botulinum toxin in 2011 was more than $2.1 billion compared with just $384 million in 2000 (450 percent growth).

Surgical Aesthetic Procedure Revenue Was Significantly Correlated with Multiple Indicators of Macroeconomic Climate, whereas Minimally Invasive Revenue Was Not Linear regression analysis showed a significant positive correlation between surgical procedure revenue and the Dow Jones Industrial Average (R = 0.72; p < 0.01) and the Standard and Poor’s 500 Index (R = 0.64; p < 0.05), and a significant negative correlation with unemployment rate (R = −0.81; p < 0.001) (Table 1). In contrast, minimally invasive procedure revenue was not significantly correlated with the Dow Jones Industrial

Fig. 1. Total revenue for surgical and minimally invasive aesthetic procedures by year. Revenue has been corrected for inflation and is presented as 2012 U.S. dollars. Shaded areas indicate times of U.S. recessions. Revenue generated from minimally invasive procedures revenue grew from 30 percent of the entire aesthetic market in 2000 to nearly 50 percent in 2011.

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Plastic and Reconstructive Surgery • June 2014

Fig. 2. Total revenue by year for aesthetic surgical (all), minimally invasive (all), and minimally invasive procedures other than botulinum toxin and soft-tissue fillers. During this period, revenue generated from botulinum toxin and soft-tissue fillers grew from 9.5 percent of the entire aesthetic market in 2000 to more than 28 percent in 2011. In contrast, revenue generated from surgical and minimally invasive procedures other than botulinum toxin and soft-tissue fillers remained relatively stable.

Average, the Standard and Poor’s 500 Index, or the unemployment rate (p > 0.05 for all) (Fig. 3). Minimally Invasive Aesthetic Procedure Revenue Was Significantly Correlated with Multiple Indicators of Microeconomic Decision Trends and Surgical Revenue Was Not Linear regression analysis of minimally invasive procedure revenue showed a significantly positive correlation with both home prices (R = 0.63; p < 0.05) and disposable income per capita (R = 0.93; p < 0.001). In addition, minimally invasive revenue was associated with real gross domestic product per capita (R = 0.88; p < 0.001) (Table 1). This value represents the ­inflation-adjusted value of all goods and services produced in a given year divided by the population. Thus, as the productivity on a per-person basis increased, so too did the revenue generated from minimally invasive aesthetic procedures. In contrast, surgical procedure revenue was not significantly correlated with home prices, disposable income per capita, or real gross domestic product per capita (all p > 0.05) (Fig. 3).

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DISCUSSION In recent years, both government and private insurance–based reimbursement for reconstructive surgery has failed to keep pace with inflation and the costs associated with maintaining a practice, and as a result, many plastic surgeons Table 1.  Statistical Correlation Measures Assessing the Relationship between Six Economic Indicators and Revenue Generated from Surgical and Minimally Invasive Procedures Surgical Procedure Revenue (p) DJIA (

Trends and drivers of the aesthetic market during a turbulent economy.

Aesthetic procedures are significant sources of revenue for plastic surgeons. With the popularity of nonsurgical aesthetic procedures, many plastic su...
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